Way around the Amazon rip-off

by Frank Chung

1st Jun 2018 11:18 AM

FROM July 1, online retail giant Amazon will attempt to force Australian shoppers to use its local website featuring a much smaller, much more expensive range of products than its international sites - but there are plenty of ways to get around the block.

Amazon said the change was in response to the Turnbull government's new online GST laws, which require overseas businesses to collect the tax on products under $1000.

Treasurer Scott Morrison slammed the move, saying if the online giant wanted to "take their bat and ball and go home" Australians had "many other choices available to them".

"Of course we're going to proceed with this," he told reporters on Friday.

"It's $300 million estimated revenue that will be going to the states and territories for schools and hospitals. We think it's a very fair and reasonable step and I know retailers have been wanting to see this for some time.

"I find it hard to believe that one of the world's most technologically advanced companies, two years later now say they're unable to work out a technological solution when it comes to the simple application of a sales tax on their products in Australia.

"They face different VAT rates all around the world, UK, Canada.

"I think it's disappointing that Amazon will take this out on consumers in Australia but that's their commercial decision. If they don't like selling things into Australia because they don't like paying tax, there are plenty of options here at home."

Australian shoppers may disagree, however.

As Amazon customers noted at launch, many products sold by third-party sellers are significantly more expensive on the Australian site, meaning it was already cheaper to buy from the US and pay the shipping fee.

For example, the popular Unicomp Ultra Classic Keyboard - a favourite among PC enthusiasts - costs $139 on Amazon.com but $360 on Amazon.com.au, a 160 per cent mark-up, while a Marc Jacobs Jane West End Suede handbag costs $894 compared with $2172.

The July 1 block will make it slightly harder - and more expensive - to buy things from Amazon international, but there's a good chance it will still be better than paying inflated prices on the Australian site.

Here's how you do it.

First, you'll need to sign up for a private VPN (virtual private network), and switch to a US IP address. VPNs are like a middleman for your internet connection. Many people already use them to trick streaming services like Netflix into thinking they are inside the US to get around content blocking.

"You'll still get slammed for the GST by customs on the way in, but it's 10 per cent on massive savings you can't get in Australia anyway. The consumer still wins out," said 56-year-old Greg, who spends between $2000-$4000 a year shopping online.

While eBay and Alibaba confirmed on Thursday they would not geoblock Australian shoppers, Gartner principal analyst Thomas O'Connor has warned stores like ASOS, Nordstrom or Macy's may follow Amazon's lead.

"This could be the start of a trend where there are more restrictions placed on shipping to Australia," he told The Daily Telegraph.

"It would be surprising if others don't join Amazon. [Price rises are] definitely a possibility. If there are more retailers who join Amazon by doing this, that becomes more and more real, and more and more likely."

The Australian Taxpayers' Alliance said the Turnbull government's online shopping tax "punishes Aussie consumers" and denies shoppers "the same choice available to billions of shoppers worldwide".

"Last year, the ATA gave evidence to a Senate inquiry that the online shopping tax would not make Australian retailers competitive, would not raise a significant amount of revenue for the government and that the cost of implementing the tax would force major online platforms to exit the market or cease serving Australians entirely," ATA policy director Satya Marar said in a statement.

"Now, after persistent denial by the government, we see these consequences in action. With another federal election on the horizon, the online shopping tax is a failure by the government to prioritise the interests of working Australians and their families.

"Instead, we see capitulation to intense lobbying by major retailers whose products remain significantly more expensive on average than similar goods available online overseas due to a combination of burdensome local pressures such as zoning laws, electricity costs, strict labour regulations and red tape."

Amazon announced the move on Thursday in an email to customers, apologising for "any inconvenience" but saying the change was necessary to "allow us to remain compliant with the law".

An Amazon spokesman said the company "had to assess the workability of the legislation as a global business with multiple international sites". "Based on our assessment, we will redirect Australian customers from our international sites to Amazon.com.au," he said.

On Thursday, Mr Morrison defended the decision to push ahead with the controversial change and slammed Amazon - which could become the world's first trillion-dollar company - and its founder Jeff Bezos, the world's richest man.

"The second biggest company in the world, run by the richest man in the world, shouldn't get a leave pass from paying tax in Australia," he said.

"The government doesn't apologise for ensuring multinationals pay a fair amount of tax here in Australia. That tax revenue is used to fund essential services.

"If multinationals aren't forced to pay their fair share of tax, they will have a competitive advantage over retailers here in Australia, on our own main streets and in our shopping centres."

Around 4.6 million Australians visited Amazon's US site in November 2017, the month before its Australian website went live, according to online measurement firm Nielsen.